The Special Investigating Unit (SIU) is challenging the decision of the Supreme Court of Appeal (SCA) in favour of two companies associated with property mogul Sisa Ngebulana concerning an invalid government lease reportedly valued at R612-million.
The long-running legal matter started in February 2017 when the SIU applied in the Pretoria high court to set aside a lease between Phomella Property Investments and the department of public works (DPW) and for Phomella and the Rebosis Property Fund, owned by Ngebulana, to pay R104m in wasteful expenditure incurred during the lease. The SIU contended the lease covered an area greater than the department of justice (DoJ) needed.
A high court judge found that the lease was invalid but did not order Phomella and Rebosis to pay back the R104-million.
The SIU had applied to the SCA to overturn the Pretoria high court’s verdict.
“The [R104-million] figure represented the SIU’s calculation of the rental which had been paid for that excess area,” the SCA judges wrote.
The SIU also applied for the court to declare the lease unlawful for two reasons. It said the DPW failed to follow an open bidding process in concluding the lease, adding that if it was found that a negotiated lease was competent, the prior requirement of a needs assessment of the space required by the DoJ had not been met.
But the SCA also differed with it.
“There is no appeal against the declaration of unlawfulness which, accordingly, stands. Instead, the SIU sought leave to appeal against the refusal to make an order,” the SCA judges wrote.
The SCA judges agreed with the high court judge regarding the ruling not to order Phomella and Rebosis to pay back the money. They wrote that these findings by the high court included that Phomella and Rebosis were unaware of any irregularities in the conclusion of the lease, and the DoJ required less than the entire Salu building.
“The DOJ occupied the entire building for the duration of the lease. The rental charge was a market-related one.
“To prepare the building for occupation by the DoJ, Phomella had cleared it of some 100 tenants. In addition, it had spent more than R81-million in refurbishing the building,” the SCA judges added. “No undue benefit was received under the lease by Phomella, Rebosis or Mr Ngebulana,” the SCA justices wrote.
“None of the high court findings can be faulted,” they added.
Thus, the SCA judges found no basis to uphold the SIU’s appeal against the failure of the high court not to order Phomella and Rebosis to pay R104m.
The SIU has filed the application for leave to appeal the SCA’s April 3 judgment with the Constitutional Court on April 21.
Though the SIU had filed papers for the leave to appeal last week, the apex court had not a allocated a date for the hearing at the time of going to print.
For more business news from Sunday World, click here.
Follow @SundayWorldZA on Twitter and @sundayworldza on Instagram, or like our Facebook Page, Sunday World, by clicking here for the latest breaking news in South Africa.
